Romania PM announces technocrat cabinet, requires parliament support

by Reuters
Sunday, 15 November 2015 14:03 GMT

(Adds Ciolos, analysts, detail)

* Confidence vote due to take place on Tuesday

* Swift resolution to political instability is benign for markets

* New government will prepare country for 2016 parliament election

* Ciolos has been European farm commissioner, Juncker's adviser

* Anti-corruption expert named justice minister

By Radu-Sorin Marinas

BUCHAREST, Nov 15 (Reuters) - Romania's Prime Minister-designate Dacian Ciolos unveiled a cabinet of technocrats with a one-year term on Sunday, including European Union experts, diplomats and civil society leaders, which is expected to win broad support in parliament.

Last week, President Klaus Iohannis named the former European Commissioner Ciolos, 46, to head a cabinet to replace that of leftist Victor Ponta, who quit on Nov. 4 due to public anger over a deadly nightclub fire which killed 55 people.

Among the line-up, Ciolos said he selected Anca Paliu Dragu, an economic analyst at the European Commission and former IMF expert, to take over the finance ministry and Cristina Guseth, an anti-corruption expert, as justice minister.

Mihnea Ioan Motoc, ambassador to Great Britain, was proposed for defence minister. Former EU ambassador Lazar Comanescu will be foreign minister and Victor Grigorescu, a member of the board of power company Electrica, will be energy minister.

"I wanted to pick competent and expert people in their fields, open to dialogue. They come from the private sector, Romanian and European administrations, civil society experts," Ciolos told reporters.

"I do hope to have parliament hearings tomorrow and complete them with a final vote in parliament on Tuesday to have an active functioning government as soon as possible."

The new cabinet's first task will be to prepare a 2016 budget and pass it through parliament. Parliament had already earmarked tax cuts including a reduction in general value added tax to 20 percent from 24 percent in next year's plans.

Fitch Ratings said on Wednesday Romania's existing fiscal plans are unlikely to undergo significant changes following the nomination of a new prime minister to succeed Ponta.

"The main sovereign rating sensitivity remains the possibility that fiscal loosening jeopardises the stability of public finances," it said.

The European Commission and the IMF warned about the scope of Ponta's tax cuts, and Romania's precautionary aid deal from the two lenders expired in September without a positive review.

Political commentators have said Ciolos's team will easily win Tuesday's vote of confidence and secure a functioning parliament majority comprising most groupings, but not the former ruling Social Democrats (PSD) of Ponta.

"On one side things are clear: they're going to surely win parliament endorsement. On the other hand, I'm sceptical this technocrat government could enforce any deep political reforms," said political commentator Mircea Marian.

The centrist Liberal opposition, a former Ponta junior ally, and ethnic minority groupings, including the Hungarian UDMR Party, which have a combined majority in parliament without the PSD, have all said they will lend support to Ciolos.

The large street demonstrations following the fire and focused against the rule of Ponta - now facing charges of forgery and money laundering - reflected growing anger at a culture of graft in one of Europe's most corrupt countries.

Local elections are scheduled in Romania in the first half of 2016 followed by parliamentary elections in December. (Reporting by Radu Marinas; Editing by Dominic Evans and Digby Lidstone)

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